Greece vs Bulgaria

The Greek-Bulgarian border is a bleak sight. A concrete slab of roof stretches across four lanes — two going into Bulgaria and two coming out. Beneath it sit several border control booths checking a line of slowly moving vehicles, mostly trucks, as they enter and leave Greece.

The drive here through northern Greece has been eye-catching. The Belles Mountains to my left and the Orvilos on my right, coming in from Bulgaria along with the river Strimonos, have made for a varied background of rolling green landscape and water: Hills smothered in thick foliage; fields of sunflowers and corn; houses covered in traditional red slate roofing (to protect against the damp, heat and cold); and, at various points along the road, boxes with crucifixes and candles — set up to remember those that have died in traffic accidents. It’s northern Greece at its most winsome.

Everything, though, ends in the concrete monotony of the border. It was once where Greece — and thereby NATO — met the Eastern Bloc’s Iron Curtain and its Warsaw Pact. But since 2007 Bulgaria has been a fellow EU state. Here on the border, where the two countries collide, the “old EU” meets one of its newest members. But not everything has changed. Greece is in crisis, but Bulgaria is still poorer — its GDP under half that of Greece. It remains far, far cheaper. And this difference, I will soon discover, is having a profound effect on this region of Crisis Greece. I have taken Alexis, a local man, along with me for the ride to find out exactly how.

* * *

About 50 meters back from the border, next to the “Splendid Snack Café Restaurant,” is a Greek Ministry of Tourism office. It seems like a good place to start. Inside I meet Georgos. Wearing a white polo T-shirt, he smokes a cigarette and greets me warmly.

He tells me that about eight million vehicles cross the border each year. A lot of tourists enter Greece in summer but mostly it’s incoming commercial vehicles, a fact that tells its own story, especially since Georgos also tells me that the number of Greek commercial vehicles leaving the country to cross the border has declined.

“Due to increased taxes Greek products are now much more expensive,” he explains. “They are not competitive so they are exporting less. Since Bulgaria joined the EU its products have come into direct competition with Greece. The country has smaller production costs so its products can be sold more cheaply.”

This, I discover, is just one of several downsides for Greece.

“Around 2,500 Greek companies have now moved across the border into Bulgaria,” he continues. “There are also now 350,000 Bulgarians working in Greek companies.” The figures seem a little high to me, but he is adamant. “The Bulgarians will work for lower wages and infrastructure and transport is also much cheaper there, so in the crisis many Greek companies see this as a way to save money and survive. Also, Bulgaria doesn’t have so many bureaucratic procedures to set up companies,” he says. He’s right there. The increased regulations that the government have imposed on the EU’s insistence have worsened Greece’s already dysfunctional bureaucracy.

Has this affected the local area? “Para Poli! [very much]” interjects another man, Aristides, who has been sitting down behind the counter smoking and watching us. Because of the increase of taxes on goods — as Greece seeks to claw as much revenue from its citizens as possible — and the lower prices in Bulgaria, many people, he explains, now take trips across the border to stock up on goods there, meaning local businesses suffer.

Truck’s drivers wait to pass at the border between Greece and Bulgaria. SAKIS MITROLIDIS/AFP/Getty Images

Georgos and Aristides even tell me they themselves do it. Showing me a packet of Davidoff cigarettes, Aristides tells me it costs €4 in Greece but only €2.80 in Bulgaria. How often do they go? I ask. “Whenever we have the opportunity,” comes the answer. They pile into a car or bus from their homes and make the trip across. They buy everything from supermarket goods to cigarettes to alcohol. Yet more money lost by Greek shopkeepers. Georgos points to his polo shirt. “In Greece this costs €65; in Bulgaria its only €25. And it’s made in Turkey!” he laughs.

“That’s the sad thing,” Georgos continues. “The goods in Bulgaria may be cheaper but the quality is much worse. That’s why we see a lot of richer Bulgarians and diplomats driving into Greece to buy better stuff. But now we Greeks cross the border to buy cheaper products of inferior quality. The crisis has driven us to this.”

* * *

After saying our goodbyes we drive up a winding road that runs parallel to the border, going into thick countryside. Wild, overhanging bushes sprout on either side of the road. The asphalt is cracked and fractured. Long-abandoned, wooden lookout posts gaze across the border from high ground. This area of the country is heavily agricultural and I am keen to hear how Greece’s farmers are doing in the crisis.

The village of Agkistro, right on the Bulgarian border, has a population of around 410. We pull up by a small fountain. People wash their hands and quench their thirst in the afternoon sun. A policeman rinses a cloth in the water.

A few streets away, I meet Christos, a local farmer, on the porch of his house. Topless, with a pale torso and a deep tan from his elbows downwards, his hairy chest and stubble are flecked with grey. He chain-smokes throughout our interview. His wife brings out iced water and cake for us. In the background his six-year-old daughter Apostolina plays on a swing.

Christos grows wheat, corn and canola. He has a license for 350,000 square meters of land. Things are not good. Since May the weather has been very dry — bad for crop production. Normally he could expect to yield about 250-300 kg of product per 1,000 square meters, but this year he’s produced only 50 kg due to the severe weather conditions. He has all his own equipment and receives, like all farmers, subsidies, both on what he sells and for the equipment needed to farm it. Farmers are subsidized by the number of hectares they cultivate, he explains. The problem is that, over recent years, the subsidies haven’t been forthcoming.

“The Greek government reimburses me on taxes for petrol use,” he explains. “Approximately 30 percent. I receive it each year, in two instalments. But from 2011 onwards I haven’t been subsidized properly — usually there was a delay of one or two months maximum — but this year I haven’t been paid at all. I believe it’s mostly because the government doesn’t have the money — it’s not political.”

He is faring slightly better with the EU subsidies, which are still coming, but not, he says, in the way that they should. “The EU is a good union but the funding provided for agriculture has not always trickled down to the farmers themselves; it’s often swallowed up by bureaucracy and sometimes the funds are deviated to other, non-farming areas.”

“The prices I pay for raw materials are also too high,” he continues. “I pay approximately €23 per sack of fertilizer and approximately 60 cents per kilo for wheat seeds, which is too expensive. This is due to longstanding problems like weak unions but it has intensified during the crisis: raw materials still cost the same but my selling prices have dropped because demand [for my produce] has dropped.” Often, he tells me, he has to sell goods for 50 percent of their production cost.

In your own words, I ask him, how has the crisis affected your business? He lights yet another cigarette. “The crisis has affected me hugely because of the enforced changes in government policies. We used to have the Agricultural Bank, which gave out loans specifically for farmers. But after the crisis the EU requested that the bank be shut down as part of its financial restructuring demands. Now we don’t have access to the same financing. We can still get loans from other banks, but they are ordinary commercial banks and the amounts we can borrow are much smaller. I considered myself an organized farmer because I have all the necessary equipment, but I cannot afford to run it.”

I want to see one of his fields and we quickly pile into his truck. I sit on its exposed back and bounce around as we drive through some dirt tracks until arriving, a short time later, at a small field he owns. It’s a yellowy-green patch of ground; strands of yellow sprout from the earth. This, Christos explains, is canola. He grows it on contract for a local factory, which turns it into biodiesel. Lighting another cigarette as he leans against the door of his truck he wistfully outlines yet more of his problems.

“The canola seeds cost €2,800,” he tells me. “I sell the total produce for €2400.” As with all Greeks he is suffering due to increased taxes that have come as part of the bailout packages. Taxes on imported raw materials and VAT, which has gone from 13 to 23 percent, have combined to squeeze the profit out of his business. “My taxes have doubled,” he concludes gloomily.

He also faces another problem: increased competition from Bulgarian farmers. “Their raw materials and the wages they pay are much cheaper than ours,” he says, “so they can produce much more cheaply than Greek farmers. Products come in from Bulgaria which out-compete us on cost.”

His phone rings mid-conversation. It’s a friend. They discuss some farming issues and then joke about moving to Albania for better work opportunities.

Will your business survive? I ask. “The way it’s going, no,” he replies. I ask if he blames the Bulgarians for part of his problems. “No, the Bulgarians do what they do and they do it correctly — we need to find a way to do produce at a lower cost but with all the taxes this is impossible.”

* * *

On the drive back, Alexis gives me his views on the crisis Greece’s farmers are facing. “It’s all about the misuse of subsidies,” he tells me as we pass a tractor carrying bails of hay. “Farmers were given huge subsidies and they just wasted the money — they bought equipment they didn’t need, just because it was subsidized.”

“I give you an example: One guy I knew had 1,000 hectares of land. A single tractor is enough to cover about 500 hectares. I asked him how many tractors he had and he said seven. Seven! I asked him why and he said it was that so he wouldn’t have to go to the trouble of having to change parts if one broke down. He also had a combine-harvester that can be used for a maximum of two months per year — and it costs between €50,000-80,000. That’s the kind of ridiculous spending the subsidies brought. Now they have all this equipment that can’t be used because there’s no demand.”

“My car at home has 450,000 km on the clock but I still use it! Who in Greece keeps a car for that long? It’s the system that’s wrong!”

“And the EU is culpable, too,” he continues — on a roll now. “They knew the money was being misused. Why did they tolerate it? Because they [member states] were happy to keep selling their equipment.”

It also brought corruption, too, apparently. “People would also use the money for other things,” he continues. “They’d get €12,000 in subsidies — spend €10,000 on equipment and the other €2,000 on their home.”

“Yes, the Bulgarians don’t face the same sort of taxes the Greeks do but they also never received any subsidies until they joined the EU, so it forced them to develop more advanced and effective techniques. So that’s another issue to think about when comparing Bulgarian and Greek farmers.”

* * *

I am interested to know what Bulgarians — who, having spent decades behind the Iron Curtain are no strangers to hardship — think of Greece’s crisis. Back at Alexis’ house I meet Krasimira, a Bulgarian who works for a company that packages vegetables for a major supermarket chain in northern Greece. She works hard: separating and cleaning vegetables collected from the fields as they come in. Then she packs them in boxes before they are sent out for distribution to the supermarket’s stores. She arrived in Greece in 1988 and was illegal until Bulgaria joined the EU 19 years later.

Krasimira has always worked in the agricultural industry. And it’s a hard industry: the hours are long; it’s tough physical work. Do you, I ask, think that many Bulgarians do the jobs Greeks don’t want to do? “Yes!” she replies. “In my first job we worked from morning until night — for 4,000 drachmas per day — no Greek would work for that. We used to wait for the sun to set so we could go home. Even now, when I have a day off I’m asked to go and work because Greeks don’t want to do these types of job.

“On the weekends I work in a taverna,” she continues. “The owner said he wanted to hire some Greeks to help them in this time of crisis. But they only stayed a couple of days — they couldn’t handle it. I’m still there.”

“The problem with the Greeks,” she says, “is that they don’t want to work.”

Companies that were not wiped out by the crisis moved across the border to Bulgaria where business costs are cheaper. SAKIS MITROLIDIS/AFP/Getty Images

“At work the other day we were listening to the radio and it said Greece is the only country in the world where the delivery boy comes faster than the ambulance!” she says by way of illustration.

I ask her if she thinks things will change now that the eurozone says the Greeks have to reform their ways. “I’ve been in Greece for 27 years and I am convinced this mentality is not going to change,” she replies. “Everything may be in crisis but at midday the Greeks still want to stop and rest for three hours while the sun is at its strongest.”

Krasimira is in full flow: “A Greek I know who works in Bulgaria and is married to a Bulgarian woman was invited onto a Bulgarian talk show and asked what he missed most about Greece: his answer — Siesta time!’”

“No shop closes at 2pm in Bulgaria. The big supermarkets only close on January 1 — New Year’s Day. Other than that, they work 24/7.”

So do the Greeks have themselves to blame for the crisis, I ask? “Absolutely!” she says. “They have learned to expect others to do the work they should do themselves. They aren’t motivated to work — I hear many housewives say they are bored because they don’t have anything to do but at the same time say ‘we don’t want to do this or do that.’”

“In Bulgaria its very rare that young people don’t work. And they take pride in their work; they want to do it well.”

“The mentality is totally different here,” she rolls on. I can’t stop her. “It’s not right: people took loans to go on vacations; used credit cards for everything — and they treated this money more like grants than loans. And at the same time everyone thought things were running smoothly; they spent their money on consumer goods not on investing in anything productive — and no one thought about the future. It’s like when you go to a restaurant, eat and drink, but when the bill comes you can’t pay it.”

Krasimira is gloomy about the future. She doesn’t think Greece will implement the necessary reforms and will, in the end, have to leave the eurozone. As ever, she views the situation through a Bulgarian prism. “Greece has received €30 billion from Europe,” she says. (In fact the figure is far higher). “That’s more than seven other Balkan countries have received put together — I saw it on Bulgarian TV. You’ve got to pay back your debts in order to take more loans. If I ask you for a loan you’ll give it to me; if I can’t pay it back you wont give me any more.”

She has a final comment — on the EU subsidies. “In Bulgaria the state doesn’t give subsidies to the farmers.” She points to some sprinklers watering the garden. “So what you see here: water being wasted, you’ll never see in Bulgaria. My brother has 2,200 hectares there and grows corn and wheat and he is not allowed to overly water them, he has to rely on the weather. If it’s not good he has a problem.”

“Yes, the subsidies have made Greek farmers spoiled and wasteful. But since Bulgaria joined the EU and started receiving subsidies you’ve seen the same thing — people receiving subsidies and using them to buy houses and consumers goods instead of investing the money.”

The EU as resource curse: it’s an old tale — and one that seems to have had disastrous effects for Greece, which for years grew fat on easy money. Now in its time of crisis it must watch its poorer, leaner neighbor to the north further compound its deep, almost existential, despair.

This article is part of a series, to read the rest of the series, click here.

David Patrikarakos is the author of “Nuclear Iran: The Birth of an Atomic State,” a Poynter fellow in journalism at Yale University and associate fellow, School of Iranian Studies, at the University of St. Andrews. You can follow him on Twitter at @dpatrikarakos.

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The Economist

A long and detailed article about the state of things in GR and BG, I’d like to note that the author does not check facts as well as he draws the storyline. For instance:

– Increased VAT (“taxes on products” in the article) cannot be the cause of low profits in Greece. Incoming VAT is deductible from outgoing VAT so it is neutral on the profits or losses of the company.
– VAT cannot be the cause why Greek farming is uncompetitive; the article gives evidence that canola production for biodiesel is not profitable – so stop producing it!
– The national authorities are responsible for checking claims for farming subsidies, and do follow-up audits, i.e. Greece’s own task.
– A country is according to the 65 year old EC treaty NOT allowed to pay national subsidies to any industry; the EU farming support is supposed to be uniform across Europe; I am referring to the Greek fuel subsidies to farmers.
– Border trade is common between most countries, of course also in GR and BG. Even Norwegians travel to Sweden to do shopping. The price differences seem normal due to differing PPP – not mentioned by the author.

Posted on 8/6/15 | 9:18 AM CEST

Etienne

“‘Greeks don’t want to work”…more bad stereotypes about a whole nation just because a (ungrateful) woman says so. David, with each article you write you reach a new low in your career as a “journalist”.

Posted on 8/6/15 | 10:09 AM CEST

Jay

It is like trying to understand why Chinese Can’t Understand Why The French Work So Little

“We the Chinese think all the unemployment is because people can’t work enough,” said Xiao, a restaurant owner who declined to give her last name as she dished out Wenzhou specialties such as chewy stir-fried rice cake and beef hot pot to young Paris professionals. Even the dining habits of the French reveal a lack of get up and go, she added. “I have people who linger for three hours after they’re done eating. It drives me crazy!”

Bulgarians like Chinese are brought up in an environment where they’ve learned to be obedient and diligent and most citizens are in fact bound in servitude. The Greek/Westerns tend to be more independent and creative in their approaches to work, something that I attribute to the Greek/ Western emphasis on democracy, ethics, values such as 8 hour work day, pension, medical insurance ect..

Border trade loss is not that big deal. After all, Greece is becoming a preferred summer break destination for both Bulgarians and Romanians.

The border was not crossed just by trucks, last year the official numbers tell us that 1.5 million Bulgarians went to Greece (mostly tourists), but the real numbers are far from it – you can cross the border at Makaza and you only have to wave your ID, nobody writes it anywhere, and they hardly even look if it’s your ID. Even if you keep using the official numbers , this is nearly a bullion spent from Bulgarians in Greece, especially in Northern Greece.

Greeks are not lazy (well, some of them are), but they avoid taxes. Spend a week there and you’ll notice how some of the receipts you get are not from the same day or you only get something written by hand that you can hardly read. It’s much the same in Bulgaria, and it’s not only a fault on the ministries of finances that cannot collect the taxes, but the whole governmental systems which are despised in both countries. Nobody wants to pay the government money that will be spent with hardly any control.

VAT cannot be blamed for crossborder prices (it’s deducted and paid in the destination country). And no matter how it sounds – Greek vegetables and fruits are in every market in Bulgaria, often sold at way under the cost of the Bulgarian counterparts.

Posted on 8/6/15 | 12:28 PM CEST

Igsi

The northern part of Greece is Macedonia, a land stolen from the Macedonian people. They were beaten thanks to the western countries and then either assimilated or deported from their own land. Then there was a population exchange with Turkey. Macedonians disappeared from their land, only few remain with their identity in tact.

Trevor

Michael

Jay

According to Mazower, the situation of the Greek workers was very different than that of Bulgarians etc. Up until 1943 there were almost no Greek workers volunteered to work in Germany. In fact the number of workers from Bulgaria who was not even occupied was many times greater than that of Greece. Later on, the German occupation authorities set up an effective propaganda and a few Greeks went to Germany for work. The Germans deeply regretted having Greeks to work in the factories. According to the German archives they are described as lazy and dangerous. Indeed, most of the didn’t want to work for the Germans and actually went there because of the famine. In addition they were trouble makers. They would argue with German workers over politics and the regime and get into fights. There have been reports of angry Greeks beating uniformed Hilter Youths in the streets. In addition many German women developed closed attachments with Greeks much to the horror of the authorites. A decade later when thousants of Greeks immigrated to Germany for work they earned the reputation of hard working people. Their initial “lazy” behavior in 1943, can be seen as a response to slavery and to what Germans did to Greece.

GREEKS HAVE A LAZY BEHAVIOR WHEN WORK LIKE SLAVES..GREEKS INVENTED DEMOCRACY AND ETHICS THEY CANT BE EXPLOINATED… GREEK WORKERS DEMAND 8 HOURS WORK, GOOD MONEY, MEDICAL INSURANCE ECT..OTHERWISE SEE THEMSELVES AS SLAVES AND REFUSE TO WORK ..IT IS NOT LAZINESS IT IS JUST REACTION TO SLAVERY… GREEKS ARE NOT SLAVES LIKE PEOPLE FROM SKOPIJE WHO DARE TO CALL THEMSELVES MACEDONIANS … REAL MACEDONIANS ARE FREE PROUD HELLENES… THAT’S A BIG DIFFERENCE BETWEEN BEING A SLAVE AND A HELLENE DUDE..